Stock Funds Bring Big Rewards, But Beware Bonds

This transcript has been automatically generated and may not be 100% accurate.

I ... stock funds give investors a lot to cheer about in the first three months the year picking up on the bullish two thousand and twelve ... for MarketWatch I'm Jonathan Burton ... and this was that quarter where investors came into the market in a way for the first time since the financial crisis into thousandeight ... the sun double digit gains in large caps small caps midcap stocks ... the best performers were in areas that people use everyday staples like health care consumer ... and energy stocks are up in large part because the Federal Reserve is so accommodative interest rates are low ... and is also a sense that the U S economy after so many years is improving and that's giving people more reason to buy things are seen an upsurge in housing and also demand for stocks ... even as the SNP five hundred in the Dow to record territory in the US ... things around the world were a bit more mixed ... and in Europe for instance the euro zone crisis put pressure on markets there so he had ... gains of ... maybe two percent three percent in the quarter from stock funds ... that invest in that part of the world perceives ... ten percent eleven percent ... in the States in emerging markets they also took a hit ... he had to using ... performance from funds that are dedicated to China and India for ... but in Japan where the country is taking steps to lift its economy ... stock funds performed extremely well and rival the US ... on the performance basis but in bond funds were investors have been pouring money ... there's times that that market is breaking down ... so what happened in the first quarter is that ... on funds that invest in ... riskier assets ... did ... fairly well they were up a couple of percentage points but where were seeing weaknesses in the government on market ... and also in the Treasury inflation protected ... the rally continue others a lot of optimism building on Wall Street and among individual investors ... but as usual be tough to watch the price to pay ... or you'll pay the practice ...